Guidelines - NADA.com

Guidelines

November 2013

NADA Used Car Guide Industry Update INSIDE:

NADA Official Used Car Guide® Update

New & Used Market Trends

Federal government closure exacerbates



Since October 2011 Prices drop by 3.5%; NADA’s used vehicle price index falls to 123.8.

normal seasonal softness The political impasse that led to the two-week long federal government closure at the beginning of 

October affected consumer confidence enough to

November Official Used Car Guide® Movement Average trade-in values reduced by an average of 2.5%.

ding both new vehicle sales and used prices for the month.

NADA Official

Wholesale used vehicle prices for units up to eight

Used Car Guide®

years in age fell by 3.5% in October, nearly a point

Value Trends

higher than the 2.6% decline recorded in September;



New Vehicle Sales Rate Flattens Out October’s annual rate remains little changed at 15.15M; prior-year growth hits 11%.

the month’s figure was also sixth-tenths of a point more than last year’s 2.9% decline. Without the



drama created by federal lawmakers, it’s likely that

Volkswagen’s New Deliveries Plummet Sales fall by 18%; incentive spending grows by 21%.

October’s rate of decline would have been right in line with recent seasonal norms.

NADA Used Vehicle Price Index Vehicles up to eight years in age. Seasonally adjusted. 130

down one point from September’s figure of

120

124.8. Year-to-date, however, prices remain

110

year, things weren’t much different as midsize van prices fell by 4.2% during the month.

Jul-12

Month

Source: NADA

Monthly AuctionNet Price Change - September v. October 2013 Vehicles up to eight years in age. 0.0%

The segment’s acute decline can be attributed

-0.5% -1.0%

to its substantial rental fleet exposure and the quantities of similarly equipped units at auction over a compressed period of time.

-1.5% Percent Change

fact that rental companies remarket large

-2.0% -2.5%

-2.3%

-3.0%

-2.4% -2.8%

-2.9%

-3.5% -4.0%

-3.6%

-3.4%

-3.4%

Mid-Size Car

Mid-Size Utility

-3.5%

-3.8%

-4.5%

-4.7%

-5.0% Compact Car Source:NADA NADA Source:

Compact Utility

Large Pickup

Large SUV Luxury Car

Luxury Utility

Segment

NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | www.nada.com/b2b

Mid-Size Van

Market Average

Sep-13

Feb-13

Oct-10

Dec-11

Mar-10

May-11

Jan-09

Jun-08

Aug-09

Apr-07

Sep-06

Nov-07

Jul-05

Feb-06

Oct-03

Dec-04

May-04

Jan-02

Aug-02

Mar-03

Jun-01

where prices fell by 4.7%. Looking back one

Apr-00

70 Nov-00

decline was recorded in mid-size van segment

Jul-98

80

Jan-95

At the segment level, the biggest monthly

Oct-96

90

Mar-96

last year.

October 2013: Index falls by one point to 123.8 versus September's figure of 124.8.

100

May-97

0.5% higher than they were through October

January 2010 = 100

adjusted used vehicle price index to 123.8,

Aug-95

October’s softness dropped NADA’s seasonally

Sep-99

NADAguides.com Consumer Site Trends

Feb-99

Fuel Price Data

Dec-97

Economic Update

At NADA Used Car Guide

Used Prices Fall by Largest Amount

Guidelines | November 2013

Used Car Guide Update (continued…) A review of 2013 model year auction data reveals that there was a 19.3% increase in the number of mid-size van units running through the lanes in October compared to what was recorded in September; by comparison, volume for mid-size cars and compact utilities – two other fleet-heavy segments – grew by 8.0% and 9.0%, respectively. Despite the month’s big loss, on an annual basis mid-size vans are actually performing quite well with prices 3.5% higher than they were last October. Luxury cars and compact cars are two more segments that experienced declines slightly higher than the market average where prices fell by 3.8% and 3.6%, respectively. Last year luxury car prices fell by 3.5% and compact cars declined by 3.1% during the month – again, slightly less than what was recorded this year. Mid-size cars and mid-size utility prices each fell by 3.4% apiece, while smaller declines were recorded in the compact utility, large SUV and luxury utility segments, with prices for each dropping within a tight range of 2.4% to 2.9%. Compared to other segments, large pickups posted another strong showing last month, but October’s 2.3% decline was slightly more than the 2.0% fall recorded during the same period in 2012 and also quite a bit higher than the previous three-month average of 0.4%. Annual AuctionNet Price Change - Year-to-Date, 2012 v. 2013 Through October. Vehicles up to eight years in age. 10.0%

8.9% 8.0%

8.0% 6.0% Percent Change

On a year-to-date basis, vehicles up to eight years in age carried a mix and seasonally-adjusted average price of $15,066, a figure up slightly from 2012’s average of $15,042 and $388 higher than 2011’s average of $14,678. In terms of annual gains, large pickups and large SUVs continue to overshadow the rest of the market. So far this year, prices have risen by 8.9% and 8.0%, respectively, for each segment; for large pickups this equates to a 0.2% lift over September’s year-todate, while annual growth remained unchanged for large SUVs.

3.5%

4.0%

2.1% 2.0%

0.5% 0.0%

-0.5% -2.0%

As previously mentioned, mid-size vans have also experienced

-0.8%

-1.0%

-0.7%

-1.5%

-4.0%

substantive price growth this year, with the year-to-date increase inching up by one-tenth of a point from September’s figure to 3.5%.

Compact Car Source:NADA NADA Source:

Compact Utility

Large Pickup

Large SUV Luxury Car

Luxury Utility

Mid-Size Car

Mid-Size Utility

Mid-Size Van

Market Average

Segment

The annual change in mid-size utility prices also remained in the positive, however no growth was recorded in October and price growth stayed fixed at a figure 2.1%. Prices for all other segments are down compared to last year, with the 1.5% fall in luxury car prices being the steepest. Regarding auction volume, the number of AuctionNet® wholesale AuctionNet® Auction Volume: 4-Week Change transactions collected for vehicles up to eight model years in age fell The change in auction volume between the most recent 4 week period and the preceding by 1.2% over the four-week period ending the week of October 28th. 4 weeks. Volume by Model Year Group This comes after a slight 0.3% increase recorded during September. MY 2006-07 MY 2008-09 MY 2010-11 MY 2012-13 MY 2006-13 Period* 4-wk Period 66,050 45,591 75,067 85,130 271,838 Last month’s decline in auction transactions was fueled primarily by Prior Current 4-wk Period 62,426 43,890 76,909 85,286 268,511 Difference (%) -5.5% -3.7% 2.5% 0.2% -1.2% a 5.5% fall off in 2006-07 model year units along with a 3.7% Source: NADA decrease in 2008-2009 model year units. However, there was a 2.5% increase in 2010-2011 model year volume and also a slight 0.2% uptick in 2012-2013 volume.

November – December used vehicle price forecast Projecting through December, given the absence of any looming governmental crisis there is little to suggest that depreciation over the final two months of the year will materially deviate from seasonal trends. Lower consumer confidence does provide concern that consumer demand – and thus used vehicle prices –could take a steeper-than-expected downward turn. However, it’s believed that confidence will rebound given the end of the federal government hiatus and October’s decent employment report.

NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | www.nada.com/b2b 2

©2013 NADA Used Car Guide


Used Car Guide Update (continued…) As such, NADA expects that used prices will fall by an average of approximately 1.9% over the course of the next two months, which is an estimate unchanged from last month’s forecast. While decidedly higher than 2012’s Superstorm Sandy-influenced decline of 0.9%, this year’s forecast is just slightly higher than 1.5% decline recorded for the period back in 2011. As is the seasonal norm, depreciation is expected to progressively improve as we move through November and into the start of 2014. October’s result along with NADA’s prediction for the remainder of the year would see used vehicle prices finish 0.3% to 0.8% higher than 2012’s record level.

November Official Used Car Guide® value movement Trade-in values in November’s edition of the Official Used Car Guide® were lowered by an average of 2.5%, which is the most significant reduction recorded since last November’s adjustment of 2.7%. Reductions across model years fell within a tightly grouped range of 2.2% to 2.8%, with least-to-greatest figures corresponding to the 2009 and 2012 model years, respectively. Continuing a long-running trend, car value reductions outpaced those of trucks, this time by a score of 3.1% to 1.8%. Across car segments, more severe adjustments were centered on upper sport (-3.9%), subcompact (-3.7%) and luxury large (-3.7%) models, while values for the two most voluminous car segments (compact and mid-size cars) were reduced by an average of 3.3%. For subcompact cars, the slash in values was exacerbated by the decline of 35 cents in gasoline prices since the beginning of September, which helped to drag values for models such as the Mazda Mazda2, Ford Fiesta, Nissan Versa and Fiat 500 down by figures as high as 4.0% to 5.0% in this month’s edition. As far as trucks are concerned, the 2.1% drop in mid-size utility and van values was followed closely by a 2.0% reduction in large SUV, luxury mid-size utility and compact utility values. Values for remaining truck segments were cut by an average of 1.2%, excluding the large pickup segment where prices were trimmed by just 0.8%. There has been much made of 5.0% year-to-date increase in new pickup incentives as of late, but strong demand from both consumers and businesses (construction, mining and manufacturing) and a larger rise in new vehicle transaction prices has virtually negated any associated downward pressure on used vehicle values.

New vehicle sales climbed 10.5%, SAAR rises to 15.15M units October was a strong month as new vehicle sales of 1.2 million units reflected a 10.5% lift over last year’s 1.09 million deliveries. Ten months into 2013, the total sales figure of 12.9 million units is 8.3% higher than the previous year’s 11.9 million units. The seasonally-adjusted annual rate (SAAR) climbed to 15.15 million units in October from last year’s 14.33 million, up 5.7%. Through October, the SAAR fell to its lowest level of the year, ahead of only April’s 14.87 million. New Vehicle Sales

New Vehicle SAAR New Vehicles Sales

1.6

YoY Change

SAAR

20%

1.4

New Vehicle SAAR (millions)

Sales Volume (millions)

5%

0.6

0%

0.4 -5%

0.2 0.0

15

12% 10%

14

8% 13

6%

Percent Change

0.8

Percent Change

10%

16% 14%

15%

1.2 1.0

YoY Change

16

4%

12

2%

-10%

11

Month

0%

Month

Source: Wardsauto.com

Source: Wardsauto.com




Used Car Guide Update (continued…) Mainstream Brand Performance (Units Sold)

U.S. brands up across the board

Buick Chevrolet Chrysler Dodge Fiat Ford GMC Honda Hyundai Jeep Kia Mazda Mini Mitsubishi Nissan Ram Scion Smart Subaru Toyota Volkswagen

Domestic automakers collectively sold almost 553,000 units in October, up 13.9%, as the Big Three each grew by 10.7% or more. All three are on a roll in 2013 and together sold 5.87 million vehicles through 10 months, reflecting a 9.7% gain. General Motors continues to lead its American counterparts in not only aggregate sales, totaling over 226,000 units in October, but also growth, which was up 15.7%. Each GM brand achieved a sales bump of at least 9.5%, with Buick’s 31.2% jump leading the pack. The difference-maker for Buick was undoubtedly the Regal sedan, up 46.9%, which compensated for decreased LaCrosse and Verano demand, while the new Encore compact

Oct-13 17,555 155,214 23,452 45,314 3,674 180,544 38,841 100,242 53,555 36,379 39,754 19,738 5,700 4,752 81,866 29,977 4,940 513 34,483 141,317 28,129

Sep-13 15,623 127,785 25,251 48,576 3,157 174,595 29,959 93,915 55,102 37,464 38,003 22,464 5,306 4,001 77,828 27,397 5,131 625 31,755 139,804 31,920

Oct-12 13,384 135,305 22,222 40,611 3,720 159,209 33,570 94,810 50,271 34,023 42,452 18,622 5,888 3,981 70,928 24,785 5,887 998 26,119 129,505 34,311

Change From Month Ago Year Ago 12% 31% 21% 15% -7% 6% -7% 12% 16% -1% 3% 13% 30% 16% 7% 6% -3% 7% -3% 7% 5% -6% -12% 6% 7% -3% 19% 19% 5% 15% 9% 21% -4% -16% -18% -49% 9% 32% 1% 9% -12% -18%

Oct-12 12,163 11,708 26,451 13,505 8,757 699 3,129 19,850 5,154 25,643 3,211 4,200

Change From Month Ago Year Ago 23% 18% 0% 11% 17% 4% 7% 10% 1% 5% 15% 117% 27% 37% 16% 14% 11% 38% 20% 25% 15% 11% -6% -7%

Source: Wa rds Auto

Luxury Brand Performance (Units Sold)

SUV added 3,602 deliveries to the product portfolio. Ford Motor Company kept the good times rolling as its nearly

Acura Audi BMW Cadillac Infiniti Jaguar Land Rover Lexus Lincoln Mercedes-Benz Porsche Volvo

188,000 deliveries reflected a 14.2% increase over last October’s deliveries. The struggling Lincoln brand successfully sold 38% more vehicles than last year and had the biggest growth in the industry with the exception of the small Jaguar brand. Lincoln’s highest-selling model, the MKZ, increased sales by 80.2% and is the luxury brand’s leading seller this year, with

Oct-13 14,296 13,001 27,574 14,792 9,152 1,515 4,286 22,719 7,131 32,107 3,562 3,919

Sep-13 11,648 13,065 23,568 13,828 9,040 1,313 3,387 19,522 6,453 26,849 3,093 4,188

Source: Wa rds Auto

6.4% growth. Showing little signs of slowing down, the Blue Oval brand was up 13.4%, with over 180,000 deliveries, and was led by its Fusion sedan and its F-Series truck, up 71.3% and 13.8%, respectively. Chrysler Group LLC rounded out the three with just under 139,000 sales, which was a 10.7% improvement, but is ahead of GM for the year with 8.8% growth. Italian brand Fiat was down 1.2%, but the American makers were all up for the month, led by the Ram brand with a 20.9% sales increase. Dodge went up 11.6% thanks to the much-improved Charger and Durango demand, up 59.7% and 58.5%, respectively. Meanwhile, Jeep sales increased by 6.9% due to solid improvements by the Compass and Grand Cherokee, up 68% and 19.7%, respectively.. After months of delays to the new Cherokee stemming from engineering issues, the new Jeep SUV finally went on sale and picked up its first 579 deliveries.

Import sales growing, but lag behind domestics Importers realized 7.6% growth by selling over 647,000 vehicles in October, but were overshadowed by strong domestic sales and thus performed 2.9% below the industry average. Japanese makers were the only ones to keep up with the industry as deliveries from the island nation’s automakers were up 10.4% after punching nearly 434,000 sales, which was 67% of all import brand sales combined. Among the Japanese Big Three’s roughly 375,000 deliveries, a 9.5% gain, only Nissan posted an aboveaverage month with a 14.2% lift. NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | www.nada.com/b2b 4



Used Car Guide Update (continued…) Japan’s performance was primarily anchored by Subaru, which sold over 34,000 units to achieve a 32% jump and continued its remarkable run on the backs of its Forester and XV Crosstrek models, up 137% and 181.6%, respectively. As of October, the 9.1% rise in Japanese brand sales remains solidly above the industry average of 8.3%. Toyota Motor Sales had a respectable month with 169,000 deliveries and an 8.8% climb, but fell behind some of its main competitors. The Toyota brand sold over 141,000 units and 29% of that came solely from the new Corolla sedan, up 12.8%, and the Rav4 utility vehicle, up 60.8%, to offset slowing sales from the Camry sedan and the Prius lineup, down 2.6% and 6.9%, respectively. Lexus performed well with nearly 23,000 units delivered and a 14.5% lift behind strong gains from its new IS sedan and its SUV lineup, up 68.7% and 21.4%, respectively. Scion remains a sore spot for the company as it sold just over 4,900 units for a 16.1% loss and its only model to achieve gains was the FR-S sports car, up 11.4%. It was a relatively disappointing month for American Honda Motor Co. as its roughly 114,500 sales represented a 7.1% gain, which was only ahead of Mazda’s 6.0% rise among all Japanese brands. The Honda brand had just over 100,000 deliveries, but that amounted to only a 5.7% bump over last year after the Accord underperformed, dropping 11.2%. On a positive note, the Civic, up 32.1%, and CR-V, up 11.6%, were in high demand and accounted for 49.8% of the brand’s tally. Acura stood out, punching over 14,000 units, with 17.5% growth and 62.5% of the sales total came from the MDX and RDX, up 48.7% and 25.3%, respectively. The brand’s newest cars also contributed with the RLX sedan adding 829 sales on top of strong ILX sedan growth, up31.1%. Nissan North America’s 14.2% jump resulted from its over 91,000 sales, mainly due to the Nissan brand’s nearly 82,000 deliveries and 15.4% climb. The Pathfinder, Rogue and Sentra, up 90.4%, 53.1% and 49.3%, respectively, all recorded impressive months relative to last year, but perhaps the biggest surprise came from its Frontier pickup truck, up 71.8%. On the other hand, Infiniti found itself trailing much of the industry with only 4.5% growth on the heels of just over 9,000 sales. Accounting for only 10% of the company’s volume, however, Infiniti did not hold the company back too much as it strives to transform its product portfolio and brand image. Luxury makers enjoyed outstanding success as nearly every brand realized increased sales with the only exception being Volvo who fell 7.0%. Jaguar Land Rover has been steadily improving, selling 5,801 units for a 51.5% increase and the British company is now up 19% year-to-date. German luxury brands also had a successful month as Audi, BMW, Daimler and Porsche combined to sell over 82,000 vehicles, growing by 11.6%. That figure could have been much higher though as BMW had a very disappointing month with just over 33,000 deliveries and only 2.9% growth due to a 49.5% drop in X5 sales. Daimler came out as the big winner after its Mercedes-Benz brand sold over 32,000 vehicles and grew by 25.2% thanks to its E-Class and S-Class, up 22.6% and 74.6%, respectively.

Incentive spending rises to its highest point since June After declining over the last three months, average incentives spending crept back up this month to $2,583, per Autodata. While sales increased by 10.5%, the growth in incentives was larger as spending was up 11.9%, the highest year-over-year jump since March 2009.




Used Car Guide Update (continued…) General Motors spent above the industry average, with its Chevrolet brand leading the spending, up 21%, followed by Buick and Cadillac at 18% and 14%, respectively. The Ford brand took spending a step further with 35% growth while Lincoln increased only 1.5%. On the opposite end of the spectrum, Chrysler Group LLC did a better job of holding back as Chrysler was up only 9% while Dodge and Jeep were down 0.3% and 22%, respectively. Japan’s Big Three automakers exhibited more restraint as only

Incentives Average of Total

YoY Change

$2,800

Toyota Motor Sales spent more, with its Toyota brand up 13% and its

15%

industry. Similarly, Nissan experienced a 1.4% pullback while Infiniti was second to only Acura, with spending down 25%.

10% $2,600 5%

$2,500 $2,400

0%

Percent Change

even more with incentives down 36%, the biggest drop in the

Average Incentive Spending

$2,700

Lexus brand up 28%. Honda’s spending fell 13% and Acura cut back

$2,300 -5% $2,200

Continuing to befuddle its competitors was Subaru as it spent 14%

$2,100

less with average incentives of $771, the second lowest in the

-10%

Month

industry after only luxury brand Porsche at $717 per unit. The next

Source: Autodata

lowest spender among volume automakers was Honda with a 96% higher average of $1,514. Converse to Subaru’s situation was Volkswagen, as its spending increased by 14% despite sales plummeting by 18%. For the first time since December 2011, both finance and lease subvention usage went up, with increases of 9.8% and 5.4%, respectively. Customer cash continues to increase as the 19.8% jump was the highest year-over-year rise since January 2009. Incentives spending climbed at an alarming rate in October, with the only type of incentive to drop being dealer incentives, down 10.4%. With the increased growth in total incentives, it appears that automakers are pushing to maintain sales momentum, but this could be an issue down the road. Customer cash remains a detriment to used vehicle retention, but with the year-over-year jump being so high, it is apparent that automakers are ignoring the potential negative impact on used values.

Overall new vehicle supply increases by three days versus prior year Inventory saw a significant rise in October, growing by 14 days to 76

New Vehicle Days' Supply Days' Supply

days versus the prior month, while increasing by three days

YoY Change

90

18

80

compared to last year. GMC was the only brand in the industry to see

and Acura, as their days’ supply exhibited only slight increases of two and four days, respectively. Meanwhile, Chrysler Group’s inventory

Days of Supply

finish at 85 days. Among the more notable luxury brands were BMW

60 8

50 40

3

30

20

-2

10 0

-7

climbed by 24 days despite sales outpacing the overall market. Month Source: Wardsauto.com



Day Change

its inventory decrease from last month, going down by five days to

13

70


Used Car Guide Update (continued…) Clock strikes midnight: Volkswagen’s fairy tale ride turns into a pumpkin By 2005, Volkswagen’s market share in the United States had fallen to a barely noticeable 1.3% and the company’s outlook was less than stellar. Sales remained relatively flat in the years that followed, but in 2007, Volkswagen of America moved into its new U.S. headquarters in Herndon, Va. and the company reinvested in its American operations. Despite falling sales through the recession, market share continued to grow and by 2012, VW’s share had reached 3.0% and the brand notched 438,133 deliveries, its highest mark since 1973. Volkswagen, the third-largest automaker in the world, became a Cinderella story in America and it looked like the company’s dream of achieving 800,000 U.S. sales would easily become a reality. The company had reason to be confident and optimistic, particularly with its new Jetta, Beetle and Passat models making significant sales improvements in recent years. Heading into 2013, VW announced that it expected moderate sales growth of roughly 11%, but things have taken a turn for the worse this year. After only six months of the year had passed, with sales having fallen 1.0%, the brand reduced its sales target from 486,000 units to 440,000. Per an Automotive News article published in July, incentive plans tied to the company’s aggressive sales objectives pressured dealers to employ sales tactics that resulted in strained relationships with both the dealer network and consumers. At the start of 2013, VW implemented alterations to its stair-step performance bonus program, but the changes had the undesired effect of causing friction between the organization and the dealers at the expense of consumers whose dealership experience was worsened. By July, the automaker decided to unravel some of its revisions, but by then the damage had been recorded in the winter release of NADA’s bi-annual dealer satisfaction survey as a record 75% of VW dealers responded and placed the automaker below the rest of the industry with regards to dealer policies. Incredibly, Volkswagen of America is on a dismal streak of seven straight months with year-over-year sales decreases and it is not due to a shortage of vehicles. VW’s October month-end days’ supply of 115 days was the third-highest of all mainstream brands, bettering only struggling Fiat and Mitsubishi. Through October 2013, the German brand’s average incentives spending increased by 21%, behind only Hyundai, yet the Korean automaker’s spending is 44% less in comparison and is the third-lowest among all volume brands. Currently, VW is the sixth-highest spender with regards to average incentives after being only the ninth-highest at this time a year ago. This month, the automaker sold 18% fewer units than last year, finishing with 28,129 deliveries. The year-over-year percent sales decline was the worst in the entire industry and occurred despite the market growing by 10.5%. For the year, the brand is down 4.0% while the overall auto sales grew 8.3% and the only model in VW’s product portfolio with positive growth is the Beetle. Nine out of 10 models in the lineup are down from last year and combined for an 8.4% drop. With the end of the year in sight, the current state of the automaker’s U.S. operations leaves little reason to be optimistic in the New Year. Of course, America loves a nice comeback story and things can certainly turn around for Volkswagen in 2014, but unlike in Cinderella’s fairy tale ending, Prince Charming has yet to appear on the horizon.




Economic Update As anticipated, the temporary federal government shutdown and the uncertainty over the debt limit were minor drags in growth in October, and will take a small bite out of growth in the fourth quarter of 2013. Many economists estimate the shutdown, which began on October 1 and lasted until October 17, will reduce growth by between one quarter and one half of a percentage point in the final three months of the year. What’s more, reduced government spending continues to weigh on the economy overall, as across-the-board spending cuts imposed by Congress earlier this year begin to bite. In the third quarter, federal spending fell by 1.7%, slightly faster than the decline in the second quarter. As expected, the Federal Open Market Committee (FOMC) announced no change to monetary policy. The central bank will continue to purchase $85 billion per month of long-term Treasuries and mortgage-backed securities to put downward pressure on interest rates. The FOMC also left in place the conditions for an increase in the federal funds rate. The Labor Department reported that the unemployment rate rose to

Unemployment and Labor Participation Rates Seasonally Adjusted

7.3% in October - up slightly from September’s figure of 7.2% - likely

Participation Rate

11.0

Unemployment Rate

67.0

10.0 66.0

Unemployment Rate (%)

9.0

The report noted that the shutdown did not affect total jobs as nonfarm payrolls grew by 204,000 during the month. The BLS also reported that employers added 60,000 more jobs in the previous two

8.0

65.0

7.0 6.0

64.0

5.0 63.0

4.0 3.0

Labor Participation Rate (%)

because furloughed federal workers were counted as unemployed.

62.0

2.0

months than earlier estimated.

Jul-13

Oct-13

Jan-13

Apr-13

Jan-13

Apr-13

Jul-12

Oct-12

Jan-12

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Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

Apr-09

Jul-08

Apr-08

The figures show hiring picked up in the fall. Employers added an

Oct-08

61.0 Jan-08

1.0

Month Source: U.S. Bureau of Labor Statistics

average of 202,000 jobs from August through October, up from Prior-Month Change in Nonfarm Payrolls Seasonally Adjusted

Oct-12

Oct-12

Jul-13

Jul-12

Jul-12

Month

Source: U.S. Bureau of Labor Statistics

include single-family homes, townhomes, condominiums and co-ops, Total Housing Starts, Privately Owned September. This is down from a revised 5.39 million in August, but is 10.7% above the 4.78 million-unit pace in September 2012. Sales have remained above year-ago levels for the past 27 months.

Seasonally Adjusted 1300.0 1100.0 Housing Starts (thousands)

declined 1.9% to a seasonally adjusted annual rate of 5.29 million in

900.0

700.0 500.0 300.0

Jul-13

Jan-13

Apr-13

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Jan-09

Apr-09

Jul-08

Oct-08

Jan-08

Apr-08

100.0

Month Source: U.S. Census Bureau



Oct-13

Jan-12

Apr-12

Oct-11

Oct-11

Jan-12

Jul-11

Apr-12

Apr-11

Jul-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Apr-11

Total existing-home sales, which are completed transactions that

Jul-09

Jan-08

to the National Association of Realtors.

Apr-09

continued to pressure home prices in much of the country, according

Jan-09

sales declined in September, but limited inventory conditions

Jul-08

After hitting the highest level in nearly four years, existing-home

600.0 500.0 400.0 300.0 200.0 100.0 0.0 -100.0 -200.0 -300.0 -400.0 -500.0 -600.0 -700.0 -800.0 -900.0 Oct-08

year low. But that figure was likely distorted by the shutdown, too.

Prior-Month Change (thousands)

the percentage of Americans working or looking for work fell to a 35-

Apr-08

146,000 from May through July. One troubling detail in the report is


Economic Update (continued...) The national median existing-home price for all housing types was $199,200 in September, up 11.7% from September 2012. This is the 10th consecutive month of double-digit year-over-year increases. Total housing inventory at the end of September was unchanged at

S&P/Case-Shiller 20-City Composite Home Price Index Three-month moving average published with a two-month lag.

2.21 million existing homes available for sale, which represents a 5.0-

190.0 180.0

month supply at the current sales pace, compared with a 4.9-month

there was a 5.4-month supply.

170.0 160.0 Index Level

supply in August. Unsold inventory is 1.8% above a year ago, when

150.0 140.0 130.0

The consumer price index increased 0.2% from August to September,

120.0 110.0 Jul-13

Jan-13

Apr-13

Jul-12

Oct-12

Jan-12

Apr-12

Jul-11

Oct-11

Jan-11

Apr-11

Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

Apr-09

Jul-08

Oct-08

Jan-08

volatile food and energy prices, was up a scant 0.1% in September,

100.0 Apr-08

after increasing 0.1% the previous month. The core index, excluding

Month Source: S&P Dow Jones

the same pace of growth as in August. Energy prices were up 0.8% in September due to concern over possible U.S. intervention in Syria and turmoil in the Middle East, while food prices remained flat. Retail sales rose a disappointing 0.2% in August, after a 0.4% gain in July. This was the weakest growth in sales since April. Strong auto sales were the primary driver; excluding autos, retail sales were up a meager 0.1% in August. Consumer spending is growing modestly. Wage growth is weak, and higher taxes this year and income cuts for federal government workers from the sequester have weighed on after-tax income growth. Consumer spending growth will be stronger in 2014 as the drag from fiscal policy lifts and the job market continues to improve. Manufacturing has picked up from the middle of 2013 despite the government shutdown, as domestic demand continues its steady improvement and global growth has started to pick up. Demand indicators point to further near-term gains in manufacturing, although hiring growth will remain slow but steady. After leading the recovery over the past few years, manufacturing will increase at roughly the same pace as the overall economy in 2014. Slow but steady growth in consumer spending, a pickup in overseas demand and further recovery in the housing market will support manufacturing next year. Gross U.S. refinery inputs in October averaged 15.4 million bbl/d, 800,000 bbl/d below the average for June through September. Even with the recent decline in refinery runs, gross inputs remain above the five-year range for this time of year and gasoline prices have continued to move downward. Strong global demand for diesel fuel and other distillates is resulting in high prices for these products, keeping overall refinery margins attractive and refinery runs robust compared with seasonal norms, despite anemic gasoline margins. The U.S. average retail price of regular gasoline decreased 3 cents to $3.27 per gallon as of November 4, 2013, a new low for the year, and 23 cents lower than last year at this time. Prices fell in all regions of the nation for the second consecutive week, with the largest decrease coming in the Rocky Mountains, where the price dropped 6 cents to $3.31 per gallon. The national average diesel fuel price fell one cent to $3.86 per gallon, 15 cents lower than last year at this time, and the lowest price since July 8, 2013.




Economic Update (continued...) The U.S. economy grew at an annual rate of 2.8% in the third

Real Gross Domestic Product

in well above consensus estimates, which had been around 2.0%, which also is acceleration from the second-quarter GDP growth rate of 2.5%. The latest reading of economic growth shows the economy strengthened in the months leading up to the government shutdown and debt ceiling standoff. As gridlock in Washington likely shaved several tenths of a percentage point off of economic growth in the fourth quarter, this stronger-than-expected GDP growth figure may

Percent change from preceding period (%, SAAR) Percent Change from Preceding Period

quarter, according to the Commerce Department. The figure comes

6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 -9.0

Source: U.S. Bureau of Economic Analysis

Quarter

mean the economy will prove more resilient than expected in responding to those negative shocks.




Fuel Price Data Regular Grade Gasoline Prices (all formulations) $ YoY Change

$0.40

$3.90

$0.30

$3.80

$0.20

$3.70

$0.10

$3.60

$0.00

$3.50

($0.10)

$3.40

($0.20)

$3.30

($0.30)

$3.20

($0.40)

$3.10

($0.50)

Price Change

Average Price

Average Price Per Gallon

$4.00

Month Source: EIA

On-Highway Diesel Fuel Prices Average Price Per Gallon

$4.15

$ YoY Change

$0.40

$4.10

$0.30

$4.05 $0.20

$3.95

$0.10

$3.90

$0.00

$3.85

Price Change

Average Price

$4.00

($0.10)

$3.80 ($0.20)

$3.75 $3.70

($0.30)

Month Source: EIA

U.S Regular Gasoline Prices (dollars per gallon, all formulations)

US East Coast Midwest Gulf Coast Rocky Mountain West Coast

Oct-13 $3.34 $3.35 $3.27 $3.11 $3.44 $3.67

Sep-13 $3.53 $3.52 $3.50 $3.30 $3.60 $3.82

Oct-12 $3.75 $3.74 $3.62 $3.48 $3.72 $4.23

U.S On-Highway Diesel Fuel Prices (dollars per gallon) Change From Month Ago Year Ago Oct-13 Sep-13 ($0.19) ($0.41) US $3.89 $3.96 ($0.17) ($0.39) East Coast $3.90 $3.97 ($0.23) ($0.35) Midwest $3.86 $3.94 ($0.19) ($0.37) Gulf Coast $3.80 $3.88 ($0.16) ($0.28) Rocky Mountain $3.89 $3.94 ($0.15) ($0.56) West Coast $4.05 $4.12

Oct-12 $4.09 $4.09 $4.06 $3.99 $4.22 $4.29

Change From Month Ago Year Ago ($0.07) ($0.20) ($0.07) ($0.19) ($0.08) ($0.20) ($0.08) ($0.19) ($0.05) ($0.33) ($0.07) ($0.24)

Source: EIA




NADAguides.com Consumer Site Trends — New Activity About NADAguides.com NADAguides.com is the most comprehensive vehicle information website on the internet today, offering a broad range of information and services to help educate consumers in the market to buy, sell, trade, or simply shop for a vehicle. NADAguides is an alliance partner of NADA Services Corporation. The figures contained below are based on consumer activity at www.nadaguides.com and are calculated by measuring the number of unique lookups for a given period of time.

New: Top 15 Researched Models — October 2013

YoY Change in Consumer Activity: NEW Make Mercedes-Benz

2013 Rank

32%

Subaru

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

20%

Audi

14%

Acura

14%

Volkswagen

13%

Chrysler

11%

Lincoln

10%

Infiniti

9%

Honda

7%

Volvo

6%

Dodge

6%

Cadillac

5%

Ford

5%

MINI

5%

Mazda

3%

Porsche

2%

Toyota

1%

Lexus BMW

-4%

2012 Rank

Nissan

-4%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

-6%

Kia

-7%

Jeep

-13%

GMC

-13%

Scion

-15%

Chevrolet

-17%

Buick

-18%

Jaguar

-22%

Land Rover

-26%

Mitsubishi Hyundai

-29% -32%

-40%

-30%

Source: NADAguides.com

-20%

-10%

0%

MAKE Ford Chevrolet Ram Truck Honda Toyota Nissan BMW Volkswagen Honda Jeep Toyota Chevrolet Ford Ford Jeep

MODEL F-150 Silverado 1500 1500 Accord Sdn Tacoma Altima 3 Series Jetta Sedan CR-V Wrangler Camry Silverado 1500 Mustang Escape Grand Cherokee

New: Top 15 Researched Models — October 2012

-1%

Smart

MY 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2013 2013 2013

10%

20%

30%

40%

Percent Change

MY 2012 2012 2012 2013 2012 2012 2012 2012 2012 2012 2013 2012 2012 2012 2012

MAKE Chevrolet Ford Chevrolet Ford Toyota Ford Ram Truck Nissan Chevrolet Honda BMW Chevrolet Chevrolet Toyota Honda

MODEL Silverado 2500HD F-150 Silverado 1500 F-150 Camry Focus 1500 Altima Impala Accord Sdn 3 Series Captiva Sport Fleet Cruze Tacoma CR-V




NADAguides.com Consumer Site Trends — Used Activity YoY Change in Consumer Activity: USED Make Porsche Suzuki Saab Mercedes-Benz Lincoln MINI Infiniti Audi Mazda Kia Volvo Nissan Mercury Buick Volkswagen GMC Cadillac Saturn Mitsubishi Jeep Lexus Chrysler BMW Acura Subaru Ford Honda Chevrolet Toyota Pontiac Dodge Scion Hummer Jaguar Hyundai Land Rover

27%

17% 17% 14% 13% 13% 13% 12% 12% 11% 10% 9% 9% 9% 8% 8% 7% 7% 6% 6% 6% 6% 6% 5% 5% 2%

0% -1% -1% -1% -2% -8% -10% -12% -13% -14%

-20%

-15%

-10%

Source: NADAguides.com

Used: Top 15 Researched Models — October 2013 2013 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

MAKE Ford Chevrolet Dodge Honda Toyota Ford Jeep BMW Ford Chevrolet Nissan Chevrolet Jeep Chevrolet Ford

-5%

0%

5%

10%

15%

20%

25%

30%

Percent Change

Used: Top 15 Researched Models — October 2012 2012 Rank

MODEL F-150 Silverado 1500 Ram 1500 Accord Sdn Camry Mustang Grand Cherokee 3 Series Super Duty F-250 Impala ALTIMA Silverado 2500HD Wrangler Tahoe Explorer

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

MAKE Ford Chevrolet Dodge Honda Toyota Ford Nissan Chevrolet BMW Jeep Chevrolet Ford Ford Chevrolet Jeep

MODEL F-150 Silverado 1500 Ram 1500 Accord Sdn Camry Mustang Altima Impala 3 Series Grand Cherokee Tahoe Explorer Super Duty F-250 Silverado 2500HD Wrangler




NADA Official Used Car Guide® Value Trends Monthly Change in NADA Used Car Guide Value October 2013 v. November 2013 NADA Segment

2008MY

2009MY

2010MY

2011MY

2012MY*

Compact Car

-2.7%

-2.6%

-2.7%

-2.7%

-2.7%

Compact Utility

-2.0%

-1.8%

-1.3%

-1.4%

-1.5%

Large Pickup

-0.7%

-0.5%

-0.2%

-0.2%

-0.2%

Large SUV

-2.7%

-2.3%

-0.8%

-0.5%

-0.7%

Luxury Car

-2.1%

-2.1%

-1.8%

-1.9%

-0.8%

Luxury Utility

-2.0%

-2.0%

-1.4%

-1.8%

-1.1%

Mid-Size Car

-2.9%

-2.4%

-2.3%

-2.1%

-2.4%

Mid-Size Utility

-1.9%

-1.7%

-1.3%

-1.7%

-1.4%

Mid-Size Van

-3.0%

-1.4%

-1.7%

-1.2%

-0.7%

*Value movement can be influenced by newly valued vehicles. See the last page of "Guidelines" for data key.

Annual Change in NADA Used Car Guide Value November, 2012 v. 2013 YoY Segment NADA Segment

5YR

4YR

3YR

2YR

1YR

Change

Compact Car

2.7%

1.7%

5.9%

1.1%

3.6%

4.6%

Compact Utility

3.4%

3.0%

4.4%

3.2%

2.5%

1.2%

Large Pickup

9.6%

10.6%

5.4%

11.0%

5.4%

10.3%

Large SUV

9.4%

2.8%

1.2%

4.2%

3.5%

2.6%

Luxury Car

5.3%

2.7%

5.5%

1.9%

9.4%

3.1%

Luxury Utility

3.5%

8.7%

6.2%

-2.2%

0.3%

0.7%

Mid-Size Car

3.2%

1.0%

11.3%

2.2%

4.3%

5.6%

Mid-Size Utility

6.5%

4.6%

3.5%

1.7%

0.7%

2.9%

Mid-Size Van

19.3%

7.6%

3.7%

13.1%

5.0%

13.7%

*Calculations are based on vehicle age, i.e. values for 1 year old vehicles in CY2012 are compared against values for 1 year old vehicles in CY2011.

YTD Change in NADA Used Car Guide Value January — November 2013 YTD Segment 2008MY

2009MY

2010MY

2011MY

2012MY

Change

Compact Car

-13.4%

-13.2%

-11.8%

-11.2%

-11.7%

-12.0%

Compact Utility

-13.1%

-11.6%

-9.7%

-8.2%

-7.7%

-9.5%

NADA Segment

Large Pickup

-4.4%

-3.7%

-2.6%

-0.8%

-1.5%

-2.5%

Large SUV

-10.7%

-10.0%

-7.9%

-5.5%

-5.7%

-7.7%

Luxury Car

-13.6%

-12.4%

-12.2%

-11.9%

-5.6%

-9.9%

Luxury Utility

-14.9%

-12.1%

-11.7%

-10.7%

-9.7%

-11.3%

Mid-Size Car

-11.9%

-10.8%

-10.5%

-9.8%

-9.6%

-10.2%

Mid-Size Utility

-13.7%

-12.3%

-10.0%

-9.0%

-8.7%

-10.4%

Mid-Size Van

-14.5%

-11.3%

-9.0%

-8.0%

-6.5%

-9.1%




At NADA Used Car Guide

CONTACTS:

What’s New It’s here! Android device users can now download and subscribe to NADA MarketValues. NADA MarketValues is our new mobile app designed exclusively for dealers. Subscriptions start at $50 per month and are available for NADA Used Car Guide values and/or AuctionNet®, the industry’s top source for wholesale transaction data. NADA values include weekly NADA auction values, as well as monthly trade-in, loan and retail for used passenger cars and light-duty trucks. Download NADA MarketValues from Google Play or the Apple Store for $1.99 and get your FREE 30 day trial started today! Contact us at 800-544-6232 to learn more.

On the Road The 2013 Used Car Week event runs November 11-15 in San Diego and Jonathan Banks, Larry Dixon, Steve Stafford and John Beckman will be actively involved with the CPO Forum, the SubPrime Forum and the National Remarketing Conference (NRC). Starting with the CPO Forum on November 12, join Larry Dixon on the “CPO + Pre-Owned Pricing Trends, Analysis and Market Intelligence” panel at 2:30 p.m. At the same time, Jonathan Banks will be presenting a SubPrime Forum workshop on “Used Vehicle Price Trends and Understanding Difference When Considering Vehicle Age.” At the NRC Conference, you can interact with Jonathan Banks at the “Used Car Prices and Valuations” panel discussion on November 13 at 2 p.m. and then join Jonathan and Larry at 3 p.m. for their workshop session on “Contemporary Risks to Future Used Vehicle Prices.” Learn more about future Large Pickup prices, interest rates impact and the risk outlook from the resurgence of leasing. And be sure to join us for our sponsorship of the NRC Networking Breaks on November 13.

About NADA Used Car Guide Celebrating our 80th year, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the U.S. and worldwide. NADA’s editorial team collects and analyzes over one million combined wholesale and retail automotiverelated transaction prices per month. Its guidebooks, auction data, analysis, and data solutions offer automotive, financial, insurance, and government professionals the timely information and reliable solutions they need to make better business decisions. Visit www.nada.com/b2b to learn more.

Financial Industry/ Accounting/ Legal/OEM Captive Steve Stafford 800.248.6232 x7275 [email protected] Credit Unions, Fleet/Lease/ Rental Industry, Government Doug Ott 800.248.6232 x4710 [email protected] Automotive Dealers/Auctions, Insurance Jim Dodd 800.248.6232 x7115 [email protected] Automotive OEMs Stu Zalud 800.248.6232 x4636 [email protected] Business Development Manager Jim Gibson 800.248.6232 x7136 [email protected] Director—Sales and Customer Service Dan Ruddy 800.248.6232 x4707 [email protected]

About AuctionNet® AuctionNet® is an industry-unique wholesale transaction database, available exclusively from NADA Used Car Guide, in joint partnership with the National Auto Auction Association (NAAA). Over 100 million records strong and updated weekly, it captures sales from all Manheim and ADESA, as well as participating ABC, ServNet and large independent auctions, representing over 80% of nationwide auction activity.

Manager—Public Relations Allyson Toolan 800.248.6232 x7165 571.292.7593 (mobile) [email protected]

Disclaimer: NADA Used Car Guide makes no representations about future performance or results based on the data and the contents available in this report ("Guidelines"). Guidelines is provided for informational purposes only and is provided AS IS without warranty or guarantee of any kind. By accessing Guidelines via email or the NADA website, you agree not to reprint, reproduce, or distribute Guidelines without the express written permission of NADA Used Car Guide.

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